Jared Scheeler faced a tough decision this year: Spend more than $100,000 to upgrade the payment systems at his gas pumps in North Dakota or be left without protection against counterfeit cards.

By October 2017, Scheeler and every other gas-station operator in America must either accept the new chip-card technology called EMV — named after its backers Europay, Mastercard and Visa — or pay potentially half a billion dollars in collective “chargebacks” for any such fraud.

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Offering more protection against fraud than magnetic stripes, EMV is becoming the global standard for credit-card and debit payments, but the migration process in the U.S. has been fraught with problems, delays and high costs.

Gas stations are just the latest U.S. businesses to confront the challenges of EMV, following retailers and ATM operators. And they’re already behind schedule. Only about a third of gas stations will be converted for EMV by the deadline, according to Crone Consulting LLC.

“We are close to zero,” Allen Friedman, vice president of payment solutions at Ingenico Group SA, the world’s largest maker of card-payment terminals, said in an interview. “I don’t know any major U.S. petroleum companies or gas-station providers that have even started implementation.”

For gas stations, one demotivating factor is cost: About a third of the 750,000 pump dispensers are too old and would need to be replaced to accept chip cards, according to Gray Taylor, executive director of Conexxus, which looks at technology standards for the global convenience and petroleum retail market. The average price for a replacement unit: $17,000. And that’s on top of what a station might spend on new hardware and software for EMV point of sale. In all, gas stations and convenience stores would have to shell out more than $7 billion to replace or upgrade their machines to accept chip-cards, he said.

“We are not going to make it; there’s just no way we can make it,” Taylor said in an interview. “About a quarter of the industry can’t afford to do it.”

Chiro Aikat, a senior vice president at Mastercard, said the company hasn’t changed the chip-migration timeline despite calls for deadline extensions, and will continue to work with gas stations to implement EMV. Aikat said counterfeit fraud at merchants that accept chip cards fell by 54 percent in April compared with a year earlier, according to Mastercard data.

Another wrinkle: Under federal regulations, every time a gas station replaces pump-dispenser hardware, a technician must perform a safety check, said Randy Vanderhoof, executive director of the Smart Card Alliance and director of the U.S. Payments Forum. The technicians who are licensed to install and test new equipment are also in short supply, and may give priority to larger chain operators such as Kroger Co. The bulk of the more-than 124,000 convenience stores selling gas nationwide are independently owned, often with one owner running just one location.

To make matters worse, the certification of some software required to link a fuel dispenser with an EMV point-of-sale system is still ongoing. VeriFone Systems Inc., the No. 1 maker of payment terminals in the U.S., is in the process of completing its certification, according to Jennifer Miles, president of VeriFone North America.

There is also the problem of “fleet cards” — gas cards issued to truck drivers and government workers to pay for fuel. One major fleet-card provider, WEX Inc., won’t have a chip-enabled card available for use until early 2018, according to Phil Baker, WEX’s director of mobile and payments. Because chip cards have become a must-have for government clients, many suppliers like WEX are voluntarily complying with the EMV switchover — even though fleet cards don’t use mainstream payments networks like Visa and Mastercard.

“Legitimately you are looking at 2021 before all of the gas pumps are converted,” Ned Bowman, executive director of the Florida Petroleum Marketers and Convenience Store Association, said in an interview.

A sharp uptick in fraud could speed things along. With the EMV changeover happening across the U.S., criminals have been targeting the few non-chip-enabled locations left, like gas stations. According to Conexxus’ Taylor, the industry could be forced to shoulder $450 million in costs after October 2017, when banks may pass fraud charges to companies that haven’t switched to EMV.

For Jared Scheeler, managing director of the Hub Convenience Stores, based in Dickinson, North Dakota, his choice was a difficult one. In the end he expects to spend about $130,000 to upgrade three gas stations he manages in the state to accept chip cards — the equivalent of a year’s profit. Another store he helps run is opting out.

“It’s a tough one to swallow,” Scheeler said, “because any investment you make as a business you want to know that you get a return on investment. I am not expecting a return on this investment — ever.”

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